Sadio Mane, Mohamed Salah and Daniel Sturridge scored to lead the Reds to an impressive 3-0 victory over Bayern at the tournament the German club hosts at the Allianz Arena.
Earlier in the day, late goals from Fernando Torres and Luciano Vietto had secured a 2-1 victory for Atletico Madrid over Napoli, setting up a meeting for Torres with his old club.
Napoli and Bayern will play in the third-place play-off early on Wednesday evening before Atleti and Liverpool clash following the conclusion of that game.
You can find all the information you need to know about this year's Audi Cup in our complete guide.
WHAT IS THE AUDI CUP?
The Audi Cup is a biennial pre-season tournament hosted by Bayern Munich at the Allianz Arena. The 2017 edition will be the fifth tournament, with Bayern having won three of the previous four.
Three other top clubs from around the world are invited to participate, but only Barcelona have taken the trophy off of the hosts. Manchester United, Manchester City and Real Madrid have all finished second in years gone by.
Liverpool, Atletico Madrid and Napoli will complete this year's lineup.
Liverpool and Atleti's participation was announced at a rather bizarre press conference - pictured above - which saw the real-life Carlo Ancelotti sit on a panel with holograms of Jurgen Klopp and Diego Simeone, who were projected in from Merseyside and Madrid.
AUDI CUP TEAMS
It is likely that the Italian team would have been Milan - who have played at all four Audi Cups so far - but they are playing in the third-qualifying round of the Europa League and were therefore ruled out of this year's tournament.
As a result, Napoli have stepped in to represent Serie A and fill the fourth spot and will take on Atleti in the semi-finals, with Bayern facing Liverpool.
Bayern are looking to win their fourth Audi Cup and their third in a row, having defeated Real Madrid in the 2015 final. Both Liverpool and Atletico, meanwhile, are making their first appearance.
AUDI CUP FIXTURES
|Date||Match||Time (local / BST)|
|Aug 1||Atletico Madrid 2-1 Napoli||17:45 / 16:45|
|Aug 1||Bayern Munich 0-3 Liverpool||20:30 / 19:30|
|Aug 2||Bayern Munich vs Napoli||17:45 / 16:45|
|Aug 2||Atletico Madrid vs Liverpool||20:30 / 19:30|
The four participating teams were split up into two semi-finals, with the winners going on to meet the following day in the final and the losers facing off in a third-place play-off.
The matches are played back-to-back at the Allianz Arena across Tuesday, August 1 and Wednesday, August 2, with the first on each day kicking off at 17:45 local time and the second following at 20:30.
AUDI CUP TV COVERAGE
In the UK, the Audi Cup will be broadcast in its entirety on ITV4 and can be streamed online via ITV Player. Liverpool's matches will also be available to watch on LFCTV and online via LFCTV GO.
|UK TV channel||Online stream|
|ITV4 / LFCTV (Liverpool)||ITV Player / LFCTV GO (Liverpool)|
In the US, the Audi Cup will be broadcast in its entirety in Spanish on Univision Deportes. It can also be streamed online in English on fuboTV, while Liverpool's games can be accessed via LFCTV GO.
|UK TV channel||Online stream|
|Unvision Deportes (Spanish)||fuboTV / LFCTV GO (Liverpool)|
HOW CAN I BUY TICKETS?
Tickets can be purchased through Bayern Munich's official website at this link . One ticket gets you into both matches on that particular evening.
For the semi-finals, prices range from €35 (£30) to €65 (£57). They go up €5 for the final and third-place play-off, with the cheapest for the second day priced at €40 (£35) and the most expensive costing €70 (£61).